Singapore — Benchmark Dubai crude spreads strengthened in mid-morning trading in Asia on Thursday, tracking the global crude complex higher after an approaching tropical storm shuttered a major chunk of US production in the Gulf of Mexico overnight.
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At 10:00 am in Singapore (0200 GMT) Thursday, September cash Dubai crude's premium to September futures widened to $1.18/b, compared with the assessed $1.065/b at the close of trading in Asia on Wednesday.
Dubai's discount to Brent widened however, as ICE Brent futures rose sharply overnight with nearly a third of oil facilities in the Gulf of Mexico shut down in lieu of the storm.
The September Brent/Dubai EFS was notionally assessed at $2.80/b, or 22 cents/b up from $2.58/b assessed at the close of trading in Asia on Wednesday.
Nearly 32% of total output from the Gulf of Mexico has been shuttered, equivalent to around 600,000 b/d of offshore oil production. The US Bureau of Safety and Environmental Enforcement said 15 platforms and four non-dynamically-positioned rigs have been evacuated, and three dynamically-positioned rigs have been moved off site.
September ICE Brent futures were up at $67.09/b as of 10:00 am in Singapore on Thursday, compared with $65.37/b at 4:30 pm Wednesday at the close of trading in Asia. This is a jump of 2.63%.
Similarly, September Dubai futures rose to $64.29/b Thursday morning, up 2.4% from $62.79/b Wednesday evening.
The weather system in the Gulf of Mexico has a 100% chance of developing into a tropical depression within 48 hours, the US National Hurricane Center said Wednesday.
Forecasters expect it to reach tropical storm strength Thursday evening and increase to hurricane strength by Friday, with landfall near the Texas-Louisiana border. Once it reaches tropical storm strength, it would be called Barry.
--Eesha Muneeb, firstname.lastname@example.org
--Edited by Norazlina Juma'at, email@example.com